Today, the European Commission and the European Investment Bank announced the disbursement of €1.8 billion from the Modernisation Fund to support 45 clean energy-related investments in 12 different Member States. This includes the first ever investment in Portugal, which became a beneficiary Member State in 2024.
Financed by revenues from the EU Emissions Trading System (EU ETS), this disbursement brings total Modernisation Fund support to €20.7 billion for 294 investments since 2021. The Fund supports the modernisation of energy systems in the EU, specifically high impact projects that will reduce greenhouse gas (GHG) emissions in the energy, industry and transport sectors, and improve energy efficiency. These investments help countries meet their climate and energy targets, implement their National Energy and Climate Plans, strengthen industrial competitiveness, and reduce dependence on fossil fuel imports.
This second disbursement in 2025 adds to the €3.66 billion already disbursed in July for 34 investments, bringing the total disbursed in 2025 to €5.46 billion and the total number of investments across all beneficiary Member States to 79. This year alone, disbursements were made to Bulgaria (€50 million), Croatia (€224 million), Czechia (€1.78 billion), Estonia (€111 million), Hungary (€279 million), Greece (€163 million), Latvia (€40 million), Lithuania (€42 million), Poland (€1.44 billion), Portugal (€15 million), Romania (€1.24 billion), Slovakia (€26 million) and Slovenia (€47 million).
All 79 projects supported in 2025 focus on renewable electricity generation, the use and deployment of renewable energy sources, the modernisation of energy networks and improvements in energy efficiency. Some examples include:
- heating and cooling from renewable sources to district heating networks and industry in Bulgaria;
- support for the production and utilisation of heat from renewable energy sources and energy efficiency in heating and cooling systems in Croatia;
- investments in electricity storage capacity from renewable sources in Czechia;
- improvement of energy efficiency and renewable energy use in public sector buildings in Estonia;
- upgrading and modernising the electricity network in Greece;
- increasing the electricity grid capacity in Latvia;
- investments in large-scale energy storage capacities in Lithuania;
- improving energy efficiency in municipal thermal baths in Hungary;
- development of a clear air programme supporting energy efficiency improvements and heat source replacements in single-family houses in Poland;
- renewable based heating and cooling utilising existing geothermal potential, supported by other renewable based sources for natural mineral water facilities and thermal medical facilities in Portugal;
- increasing energy efficiency in EU ETS installations in Romania;
- modernisation and development of the electricity transmission and distribution network to facilitate integration of renewables in Slovenia;
- increasing energy efficiency and reducing (GHG) emissions in industry and related buildings in Slovakia.
Background
The Modernisation Fund, funded by revenues from the auctioning of emission allowances under the EU ETS, aims to support 13 lower-income EU countries (with a gross domestic product per capita below 75 % of the Union average in the years 2016 to 2018) in their transition to climate neutrality. The beneficiary Member States are Bulgaria, Croatia, Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, and Slovakia, as well as Greece, Portugal and Slovenia which became eligible for support as of January 2024, under the revised EU ETS Directive.
The Modernisation Fund supports investments in the generation and use of energy from renewable sources, energy efficiency, energy storage, modernisation of energy networks, including district heating, grids, and just transition in carbon-dependent regions. The Fund complements other EU instruments such as cohesion policy, the Recovery and Resilience Facility and the Just Transition Fund. It mobilises significant resources, which can help eligible countries support investments in line with the REPowerEU Plan and the Fit For 55 package. It operates under the responsibility of the beneficiary countries in close cooperation with the European Commission and the European Investment Bank.
The next deadlines for beneficiary Member States to submit investment proposals for Modernisation Fund support are 15 January 2026 for non-priority proposals and 12 February 2026 for priority proposals. Priority investments, accounting for over 90% of the portfolio, focus on modernising energy systems, reducing GHG emissions in energy, industry and transport, and improving energy efficiency listed in the EU ETS Directive. All other investments that qualify for the Modernisation Fund are considered as non-priority investments, subject to additional scrutiny.
More Information
Adopted disbursement decisions
Confirmations of priority investments
Recommendations of the Modernisation Fund Investment Committee
List of confirmed and recommended investment proposals
Delivering the European Green Deal
Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition said: “Modernisation Fund is a key component of EU climate and energy policy framework for achieve our climate targets for 2030 and beyond. It has proven to be an effective instrument for the targeted Member States, enabling them to accelerate the shift to renewables in their energy systems and leverage EU support.”
Wopke Hoekstra, European Commissioner for Climate, Net-zero and Clean Growth, said: “The Modernisation Fund is proving that EU ETS revenues can drive real change. By unlocking investment across all Member States, it is helping lower-income countries deliver smarter electricity networks and cleaner transport. Five years on, €20 billion disbursed signals a major milestone for Europe’s energy transition.”
Ambroise Fayolle, European Investment Bank Vice-President, said: “As confirmed by this latest disbursement cycle, the Modernisation Fund has become a key driver of clean energy investments that reinforce the EU’s competitiveness and the pace of allocations has become impressive. The EIB will continue working closely with the European Commission and beneficiary Member States to advance the Fund’s objectives.”